Question

# Annual salary plus bonus data for chief executive officers are presented in the $BusinessWeek$ Annual Pay Survey. A preliminary sample showed that the standard deviation is $\675$ with data provided in thousands of dollars. How many chief executive officers should be in a sample if we want to estimate the population mean annual salary plus bonus with a margin of error of $\100,000$? (Note: The desired margin of error would be $E=100$ if the data are in thousands of dollars.) Use $95\%$ confidence.

Solutions

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We have given:

• standard deviation of $\sigma=675$,
• desire margin of error of $E=100$.

Our task will be to determine the sample size which provides the desired margin of error at the $(1-\alpha)=95\%$ confidence level.

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